Tuesday, July 28, 2009

Chaarat Gold Holdings Ltd, the British Virgin Islands-registered holding companyof the Chaarat Group, focused on the exploration and development of metals in the Kyrgyz Republic, announced the signing of subscription agreement with China Nonferrous Metals Int'l Mining Co Ltd (CNMIM). By terms of the agreement, the Chinese company will subscribe for 22,469,289 shares in the BVI holding, at 25p per share for total consideration of £5,617,322.

On completion of the transaction, Chinese company’s shareholding will represent 19.9% of Chaarat Gold’s issued share capital. CNMIM will obtain the right to appoint two directors to the board of the company if its interest in the BVI company does not fall below 15%, and one director if its interest does not fall below 10%, for a period over 6 months.

Chaarat undertakes that upon the issuance of further shares it will invite CNMIM to participate in order to maintain its level of shareholding, on the same terms as offered to other subscribers or, where options are exercised, by reference to the market share price prior to exercise. The BVI holding also agreed not to require CNMIM to make a cash offer to shareholders under Chaarat’s articles of associations, unless CNMIM reaches a 30% threshold.

CEO of the BVI company Dekel Golan commented on the transaction: This is a significant milestone for our Company. This investment will enable us to complete the feasibility study and all other studies required for taking the project towards development. CNMIM, being very familiar with the Chinese mining environment will be able to assist in introducing the Company to financial institutions interested in financing projects such as Chaarat and to various contractors and service providers required for such development."